You invest $25,000 at an annual rate of 7.25% for one year. What is the difference in interest earned if you compound this money on a daily basis instead of an annual basis?
What will be an ideal response?
Answer: For the annual basis, the periodic rate is the same as the annual rate of 7.25%. With a PV of $25,000 and APR of 7.25%, we have 1.0725 times PV equals $26,812.50, rendering an interest earned of $26,812.50 - $25,000 = $1,812.50. For the daily basis, we have C/Y of 365, periodic interest rate = r = 0.019863% (0.00019863). Taking (1 + periodic rate) to the power of C/Y gives: (1.00019863)365 = 1.075185. Multiplying this number by PV gives $26,879.63, rendering an interest earned of $26,879.63 - $25,000 = $1,879.63. Thus, the difference in interest earned is $1,879.63 - $1,812.50 = $67.13.
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Indicate whether the statement is true or false
Describe the options for compensation of expatriate workers.
What will be an ideal response?
The return on net worth ratio is based on a retailer's _____
a. net profit, fixed assets, and fixed liabilities b. net profit, current assets, and current liabilities c. net profit, net sales, total assets, and net worth d. net profit, total assets, net sales, and net liabilities
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